As the gig economy grows, relationships between workers and companies are in the spotlight

With the gig economy growing internationally, governments and businesses are navigating how to establish regulations that are a win-win for everyone impacted. Here, Compliance Counsel Emerson Beishline discusses the gig economy boom, and what companies employing gig workers should be aware of.

Emerson Beishline

Emerson is Compliance Counsel at Ceridian with many years of experience in U.S. and international legal research and writing. In his current role, Emerson tracks U.S. and international employment legislation impacting Ceridian products, works closely with development teams to integrate compliance changes into the company’s Dayforce HCM software, and conducts legal research as needed.

Even as unemployment rates hover at historic lows of 3.9% (U.S.), 4% (U.K.), and 6% (Canada), more workers than ever are seeking work in the gig economy.

This data shows that labor markets around the world are indeed changing. As with any major disruption to the economy, governments and businesses have struggled with varying degrees of success to establish regulatory frameworks and policies that are a win-win for everyone impacted.

Why is the gig economy in the spotlight?

While workers have been piecing work together for centuries, the gig economy has really come under the international spotlight with the advent of app- and internet-based work platforms. These platforms have managed to disrupt established industries in less than a decade by taking advantage of technology to attract workers to provide flexible services in a regulatory vacuum.

Even as gig work remains very popular with workers, companies that provide gig work have repeatedly come under fire for pay and incentive structures and the lack of benefits and entitlements. While courts have struggled to define the contours of worker and business rights in the app-based gig economy under current legal frameworks, local and national legislatures have been slowly writing laws to respond to the changing landscape.

What does this mean for companies that use gig workers?

The share of gig workers in the workforce is predicted to continue to grow rapidly. In fact, the Freelancers Union predicts that gig workers will make up a majority of the U.S. workforce in just a decade. As companies increasingly seek to use gig workers as a cost-saving strategy, they may want to consider being more transparent with workers about the benefits and risks of gig work than they would otherwise need to be.

Companies may also want to proactively work with local and national governments to come up with agreements and regulations that protect workers, consumers, and businesses alike. Even as some states and the U.S. federal government are exploring innovative solutions like portable benefits legislation, companies may want to consider providing their own attractive benefits to gig workers.

By being proactive and transparent, companies can potentially avoid some of the public relations disasters that have captured the media in the last few years. These proactive strategies can also help avoid some of the negative regulatory outcomes we’ve seen happen around the world.

Learn more from our compliance team about trending compliance and legislation topics at INSIGHTS 2018.

Disclaimer: The information provided in this post is provided for informational purposes only and should not be relied upon or construed as legal advice and does not create an attorney-client relationship. You should review with your legal advisors how the laws identified in this post may apply to your specific situation.